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FCA worry

Last summer, we highlighted a call from the FCA (Financial Conduct Authority) for banks and financial organisations to use plain English.

While some took those suggestions on board, many didn’t. And with well-publicised and worrying recent changes at the FCA, there’s every chance old bad habits could be set to return.

The chancellor has decided to adopt a ‘bank friendly’ approach. In the aftermath of the economic crash, and following the PPI disaster that came shortly after, lessons seemed to be learnt. Now, with George Osborne apparently keen to aid recovery and encourage investment, he has been accused of lessening the influence of the FCA. The shadow chancellor, John McDonnell, suggested as much with the following statement.

“The chancellor has been moving towards an ever more soft touch approach by reducing the bank levy and cutting corporation tax, selling publicly owned banks off at a loss, and only last week he sat by while the watchdog he set up watered down its review into the sector, only six months after he replaced the head of the FCA for issuing large fines to banks.”

For those of us wanting to see customers looked after, this is obviously bad news. When we heard about the turmoil at the FCA, and their sudden decision to end a high-profile banking enquiry, it prompted a few questions. In particular, how will the changes effect the organisation as a protector of consumer rights?

What will now happen to those banks who failed to clean up their act regarding clearer information? The FCA is described by the Financial Times as ‘rudderless’ (and has no acting head). This may well mean that many of the organisations criticised for using too much jargon and small print will continue to do so unchecked.

And what of the many emerging smaller banks? Will they be monitored properly and effectively as they try to establish their position in the market?

The same issues remain with the worst offenders. There’s still far too much small print, and too much impenetrable jargon clouding vital information. There’s no justification for failing to adopt the initial FCA guidelines.

And, on the worst banking and financial organisation websites, what excuse is there for small, densely packed text when space isn’t an issue?

Also, many websites still use text/background colour combinations that don’t provide enough contrast, particularly for those of us whose eyesight is not as great as it once was.

We hope that the FCA mess is cleared up quickly – if it isn’t, banks and financial organisations may feel they can return to the bad old days of questionable products and gobbledygook designed to befuddle.

Recent noises made by the FCA suggest that they’re ‘ready’ to go after banks that use confusing terms. We’ll see if that’s the case. Since the pensions overhaul, many pensioners have drawn out large lump sums, and they’re now a potential focus of another mis-selling fiasco. The FCA will have a huge role to play in either watching that unfold or stepping in to help avoid it.